May 11 (Bloomberg) -- A senior Republican tax writer on the
House Ways and Means Committee is introducing legislation that
would give U.S. companies one year to bring home at a lower tax
rate as much as $1 trillion in profits parked overseas.

The bill’s lead author, Texas Republican Representative
Kevin Brady, who introduced the bill with some Democratic
support, describes the proposal as a jobs measure. The proposal,
which repeats a 2004 law, would allow U.S.-based companies, for
one year, to repatriate income earned overseas at a 5.25 percent
rate, instead of the 35 percent statutory corporate rate.

Companies including Microsoft Corp., Devon Energy Corp.,
Cisco Systems Inc. and Brown-Forman Corp. are part of a
coalition lobbying for a repatriation holiday.

“This is about creating jobs, expanding U.S. businesses
and strengthening American companies,” Brady said in a
statement today.

The bill includes a penalty for companies that bring home
profits at a lower rate and then reduce their workforce.
Companies would have to add $25,000 to their taxable income each
time they cut their total workforce below the company’s average.

With a 35 percent tax rate, the provision would increase
the company’s tax bill by $8,750 for each job cut.

Facing Obstacles

The bill faces obstacles in Congress. House Majority Leader
Eric Cantor, a Virginia Republican, supports a repatriation bill
while Ways and Means Committee Chairman Dave Camp, a Michigan
Republican, has said he wants to address the issue only as part
of a comprehensive rewrite of the tax code. Treasury Secretary
Timothy Geithner has echoed Camp’s view.

Cantor expressed support today for considering a
repatriation proposal before a tax overhaul.

“While fundamental reform will take time, repatriation is
an interim step that we can take to encourage businesses to
bring investment back to our country,” he said in a statement.

The repatriation issue has received less attention in the
Senate. The Obama administration opposes a repatriation holiday.

Critics maintain that the 2004 repatriation holiday didn’t
lead to enough job creation to justify the tax break.

“It was a major failure the first time around, and it’s
going to be worse this time,” said Chuck Marr, director of
federal tax policy at the Center on Budget and Policy Priorities,
a Washington organization that supports policies that help low-income Americans. “You make it a regular occurrence, you make
it an incentive to shift profits and investments overseas.”

The Joint Committee on Taxation estimated that a
repatriation holiday similar to the one Brady introduced would
cost the government $78.7 billion in forgone revenue, according
to an analysis released today by Representative Lloyd Doggett, a
Texas Democrat.

Brady introduced the bill with at least three Democratic
co-sponsors -- Representatives Jim Cooper of Tennessee, Jim
Matheson of Utah and Jared Polis of Colorado.